What Surprises Are Coming in Monday’s Reports?

The March 31 Prospective Plantings and Grain Stocks reports are notorious for moving the markets. This year, many are predicting major shifts in acreage mixes, at least on a regional level.

Headed into the reports, Jerry Gulke, president of The Gulke Group, says the markets have paused and are going sideways until another fundamental event happens somewhere in the world. "We’ll get that Monday morning," he says.

Unpriced grain, transportation issues, basis levels and spring planting weather will all contribute to what farmers decide to fill their planters with this spring. "North of I-90, there is a lot of grain in the bin," he says. "If you are one of those farmers who is sitting on 80% of last year’s production and it is unpriced, do you really want to plant more of the same variety?"

Farmers are facing monumental transportation issues in the Dakotas and parts of Minnesota, where producers can’t even get the trains to move grain, Gulke says. These issues are resulting in extremely poor basis. In some areas, basis is at $1.18 or $1.20. "You take that off $4.90 and that doesn’t work well," he says.

Hear Gulke's full audio analysis:

Gulke Group recently did its own planting survey. "We are seeing some significant migrations from corn to soybeans or corn to other crops in these areas," he says. "Maybe we will see a bigger migration in corn than anyone is predicting."

Monday’s plantings report is different than other reports because the estimates are based on farmer surveys in early March. A lot of conditions can change between early March and the time farmers actually start planting.

"Odds are that by the time we actually plant corn by the end of June, we’ll probably reduce corn plantings, if prices don’t get better," Gulke says.

If that happens and corn acres come in around 90 million, Gulke says, good yields on those acres will be needed. "Otherwise, we could have a carryover below 1 billion bu.," he says.